This week I talk to Dan Wood from Draft2Digital, probably the second best known eBook aggregator after Smashwords (guess who I am interviewing in 2 weeks time..). I’ve taken a different approach to this week show and tried out a semi-automated transcription service. If you like it let me know, as not convinced the effort and cost adds much…
Tim Lewis: Hello Dan. Welcome to the show.
Dan Wood: Hey thanks for having me.
Tim Lewis: Ok – I obviously been talking to you about how I’ve been doing a few shows with various ebook aggregators over the last month or so.
Tim Lewis:What eBook stores does Draft2Digital provide distribution for and can you choose which stores to go into?.
Dan Wood: Currently we go to Barnes and Noble, Kobo, Apple, Scribd, Page Foundry which is also known as saying Interra now, Tolino which is the German alliance of different e-book retailers and 24symbols which is a Spanish based subscription service but they’ve been expanding into other markets as well. We do make our whole like everything about our system is opt in and say you can use us to distribute to one of those vendors or you can use this for all of them. Exactly which ones will stand your books and whenever we add a distributor you get a nice friendly pop up that asks if you want to use your box to that vendor or if you want us to wait and ask you later.
Tim Lewis: You can choose on a book by book basis?
Dan Wood:Yes. Everybody has a choice if you want your eBook distributed to a particular retailer.
Tim Lewis: OK. I noticed on your Web site that you do print book services as well. How does that work?
Dan Wood:So it’s something up until just recently we were helping people get their books listed on CreateSpace. We did discontinue that service because it just really was not working very well as far as the cost to support people and all of the back and forth that goes in between say if CreateSpace ships books and the colors are wrong generates a lot of questions a lot of support. So in December we decided to start phasing out our support for create space. We do provide a PDF file that people can download you can use it directly to CreateSpace . Something else that we’ve been keeping our eye on is that Amazon seems to be moving print support under their KDP panel and so we will eventually that’s going to be kind of where they’re going to want authors to go for print on demand through CreateSpace. So right now were mainly answering questions for people and helping people transition to CreateSpace. We are not necessarily done with the print market like we’re looking at other partners so we really haven’t found one that fits well with our business model right now. And things just weren’t working great with CreateSpace.
Tim Lewis:I know you can use Draft2Digital to create an ePub from a Word document. From the sounds of things, you can also create a PDF as well. Are there any restrictions on what you can use those ePub and PDF files for?
Dan Wood:We can create an ePub file just from the Word document and a .mobi file and a PDF file and all of those we provide free so people can use our service to go in and format the book and download files without using us to distribute anywhere else. We’ve already built the tool it’s very automated. You know we have a lot of great feedback about the tool and how easy it seems and so we thought lets make that available to everyone. Lets make it free and hopefully because of that some people that might not normally use us will go somewhere service and we know that to be the case.
Tim Lewis: Okay, and that PDF file that you are creating, is that the PDF that you sent to Createspace or is that more a general some sort of print-ready PDF?.
Dan Wood: Yep. It’s really meant for CreateSpace. It might work like in Ingram for instance but we hadn’t done a lot of testing at that point with the file. We don’t currently distribute to Google Play but Google Play takes PDF files. So for retailers that want PDF files, we’ve got that support should we ever need it.
Tim Lewis: So in terms of Draft2Digital what makes you special amongst the eBook aggregator companies?
Dan Wood: One thing really I’ve been amazed to see we’ve grown nearly entirely by word of mouth. We just had 30000 authors last month and passed a hundred thousand books right before the end of the year and we’ve done very very little marketing it’s been something we have in fact been bad at doing. And so we recently hired a new director of marketing named Kevin Tumlinson so you might recognise that he’s got his own podcast. He’s an Indie author and actor, he’s done a great job at starting that the marketing going for us.
But I’m excited that we made this big just by the recommendations of our partners and the authors letting their friends know that we’re going to work with. I think it’s very special about Draft2Digital that we’re a private company. There are a lot of publishing startups out there a lot of companies came into being when they heard about the Amazon gold rush. They’ve got investors they’ve got to hit certain goals or they had to shut down because they’re running off of someone else’s money and if they’re not making enough money you know they either go out of business or they get bought by another company, so I think it matters that we’re a private company and that we’ve been profitable basically after our first year we’ve been profitable every other year and we’ve been reinvesting those profits into building all these new features that we’re trying to make because we want to make sure we have the best platform out there.
We’ve got I think kind of goes hand-in-hand with the private company. We’ve got a lot of transparency. We’re very very upfront about exactly how we’re making money with our model yet it doesn’t cost you anything there’s no upfront cost to use our service. We don’t make any money unless you sell a book and so that puts a real a real reason for us to make sure your book is up all the time to make sure we’re looking to get you the best visibility on the different stores because it’s kind of a partnership.
We’re not making any money if you’re not making any money. When you look at some other companies in the space and it’s not very clear how they’re making money they’re probably making money off of you and your data and so be aware of sometimes it makes sense to get into some of those business partnerships but know exactly how they’re making their money because it’s going to influence how they make their decisions and what they’re really focused on.
If a company is making money upfront by selling services or selling a package of course their biggest emphasis is going to be on getting new people and churning new people rather than supporting their current customers. Ours is not that way. You know we we obviously want to add new people but it’s much more important to us to continue selling the catalog of what we have now and growing that out. I think something we do better than anyone that I’ve seen is operational auditing and what I mean by that is we because of making money when authors make money. We noticed that a lot of vendors had technical issues every once in a while.
The digital world was very new to a lot of different companies that came from traditional publishing or companies like Apple that really weren’t part of publishing until the digital aspect of it became a big thing. And so we get through We’ve automated a lot of things like looking and making sure your book gets up every week. If your book is down we check in make sure it’s down because every once in awhile we’ve seen companies have glitches where they will list a book that was previously de-listed which can cause authors problems names on if they are in the Select program and we go through make sure the price is right and we go through and make sure the Metadata looks right, all the different stuff like that that just ends up helping sell it back better. We’re very very careful with the distributors that we add. So we do a vetting process. You mentioned earlier that there are some of the other aggregators that might get you to more places right now.
While we are always looking to add new retail channels, we’re also very careful that we test them and make sure they can perform at the speed the authors are accustomed to now and also the speed at which you have to operate in order to not cause problems for authors on Amazon, for as you know if your price ends up being lower at one of Amazon’s competitors just because they’re having a hard time changing the price. Amazon is going to be sending out a bunch of nasty emails about having a different price than on Amazon and that could cost authors money. You know we’re kind of at a weird point in the industry where I think just because the maturity of the industry a lot of consolidation is happening right now and so recently Rakuten purchased part of the Tolino operational piece is just very very interesting.
We’ve seen companies like Sony and Diesel go out of business, Oyster you got acquired by Google. This is kind of a weird time for us to add just a whole bunch of different Web sites if they’re not going to be around for very long and so we’ve got a beta program and we’ve got a lot of different channels to make contracts with and we’re testing right now but we wait and we take our time and go and live with those for our customers like.
Tim Lewis: Apart from obviously you’ve got a few stores in your beta program, What sort of functionality are you working on that’s new in Draft2Digital and have you got any functionality in terms of the system is stuff that most of the other eBook Aggregators haven’t got?
Dan Wood: We do. So you really are the way we look at it is our goal is to save authors time and that’s where we think our biggest value add is. And so it’s building tools that would just let you focus more on your writing and the marketing piece because we know authors don’t have enough time and writing is what most authors really want to spend most of their time on but they also have to spend some time in marketing it to say the ways in which the world is change. Readers want some access to authors and something that does help sell your book and then the other goal is to just help authors make more money.
So adding new retailers is part of making more money. But this last year we really focused on the time-saving role and so we’ve built out a number of tools and we’re continuing to kind of refine that as one big thing. It’s always the biggest selling point when I talk to new authors at conferences as we can do automated end matter and what I mean by that is you can give us your ePub file or your Word file and there’s an option you can check that lets us generate your end matter and we will send out at the end of your book will make and also buy page you will have like all of your books listed for that author name and we will send links that are specific to each retailer. So the version we send out to Nook will have Barnes and Noble links, the links of the book that we send out to Apple have Apple links. That’s been huge.
Whenever you add a new book you get an easy pop-up that lets you click that you want to add that to all your old books and send those out again and so just makes it really easy to make sure that you are following that best practice of having links to buy your book at the end of your book. We’ve also built a tool called the new Release Notification tool. It’s a little bit like the subscribe feature on Amazon except it works all the time. Basically if you include this in your book there is a page in an book that lets a reader sign up to hear whenever you have a new release come out. Then if they sign up through that we send them a link whenever you’re book goes live at whatever retailer they came from. And so it’s been something that’s been growing quite rapidly.
We’ve been very happy with the uptake and people using it. It’s largely aimed at authors that haven’t moved to that point maintain their own email lists yet we do encourage authors like you probably do want to have your own email list because I can be very important to your marketing efforts. But we’ve seen authors even that have an email list and are also using these new release notifications because there are some readers that just don’t want to they don’t want to be getting e-mails all the time from authors like just keep in touch with them.
They really just want to know if the author has a new book. And so we added that functionality as part of that when people sign up they can choose to hear about other new releases like this type of book and that’s something we’re going to be. We haven’t really started with that yet. We’ve had the majority of readers have opted in that we’re going to start advertising some books that we think the readers would like based on the list that they’re on in our system so that will be exciting and we think that anything we can do to help drive traffic to retailers will be appreciated by everyone.
Tim Lewis: So you are starting your own mini Bookbub off then?
Dan Wood: Yeah. I mean it’s a little bit more focused since we kind of know where the reader is and what their preferred retailer is. Obviously had a lot of venture funding behind them and so it would be very difficult to recreate exactly what they did. But you know we’re really hoping for this to be something for all of the places that BookBub does not cover. Now obviously but Bookbub just does like the big five Amazon, Kobo, Barnes Noble, Google Play and iBooks. But since we really want to help some of the smaller channels and finally the most recent tool which came out with and it’s something we’re continuing to add and new features too is our universal book links. I have friends with a lot of authors on Twitter and Facebook frequently just for a lack of time authors will end up just posting their Amazon link whenever they have a new release even if they are wide, or tweeting about their Amazon link. Some of the better authors out there will go ahead have separate social media posts for each retailer but that’s a hassle.
It’s can be untargeted and we built a tool basically using the universal book link you can put it in a social media post. You can put it in the back of your book. You can put it wherever you want to. It will redirect them the first time a reader uses that means it’ll ask them where their preferred vendor is I got to see a list of where the book is live and your preferred vendor. And then once they click on the preferred vendor and each time they click on the link it will take them to that preferred vendor. It also uses geolocation so it knows where the reader is coming in through the viewer via their Internet address. And so to redirect them to the right version of the store, so for a Canadian user that would go to Amazon Canada if it is Australian they would go to iBooks Australia and see that feature simplifies things for users and for authors it makes it where an author just can make a social media post that will reach all the readers with just one lead rather than having social media posts.
We’ve seen a lot of authors reviewing their Web site to just add the books to read link as well. The universal books a book link which is part of the books to read project very excited about that we with that we also support affiliate codes at nearly all the vendors. And so if you have an affiliate code at like Barnes Noble, Apple and Amazon keeping track of those can be a nightmare and you can introduce them at the books to read web site and then automatically append on the code for the affiliate link every time someone uses that link. So you get credit without having to really spend a lot of time thinking about it.
Tim Lewis: OK That’s actually quite a bit of useful functionality in itself.
Dan Wood: Yeah we had a lot of excitement about that around that project recommendations and different things to add to it. Some of the other stuff we are talking about like the automated end matter, we’re working on kind of redoing that to utilize a lot of that same functionality from the universal book links. But it can save authors a whole lot of time and again help make sure that authors are reaching readers no matter what their preferred retailer is because you are part of the reason Amazon end up having so much power over the entire industry is because everyone is just pushing their book into Amazon and so really for other retailers I think we need to make sure that we’re not just pushing everyone towards Amazon.
Tim Lewis:Yeah. I mean I think that’s where companies like yours and the others are good because there is an easy way relatively for people to reach an awful lot of other stores and Draft2Digital is very easy to use by my own experience.
Dan Wood: That’s entirely our goal is just to take out all the things some authors get overwhelmed. It’s so infrequent that we hear from authors who start on Amazon in some cases Amazon is the only thing they’ve ever known and if you’re in the US market that’s not uncommon just like everyone they know buys their books from Amazon. And so when they start looking at going wide and all the different options it can be overwhelming and there are different requirements with iBooks you have to have a Mac product in order to publish to them unless you use a service like Draft2Digital.
In certain countries say if you’re a Canadian author you can’t sign up for a contract with Nookpress and so you have to get an aggregator. There’s all kinds of little stuff that we have simplified and it’s paid off for us in terms of we have a lot of international authors they use us 30 percent of our sales are in international markets and so we’ve kind of focused on that. We think the biggest growth in the industry is going to come from all the different markets outside of us. And you look at how many people are starting to get mobile phones now throughout the world and access the internet with a digital reading is really going to take off for the next decade or so.
Tim Lewis: Something that has kind of come to mind. I think you’ve mentioned this before but is it the case that you you pay higher royalty pay rates for some of the companies for products under $2.99 than the actual companies themselves pay to authors who go direct. Is that correct?
Dan Wood: Yes our contracts are consistent and so if you publish a book under 2.99 or over 9.99 it doesn’t matter you’re still going to make the exact same amount with us so frequently like Kobo and Barnes and Noble have a penalty if your book is under two ninety nine they reduce the rate about half and so you know if you have a big sale at 99 cents you’d make a lot more money using our service than you would through the direct portal also above 9.99 Kobo got rid of that restriction at their site but Barnes and Noble still has a penalty above 9.99.
Tim Lewis: Is that because you are going through some sort of Publisher relationship?
Dan Wood:Yeah. The way in which we get into their systems and our contracts are the exact same as a traditional publisher might be. So when our books go into Barnes Noble it’s the same mechanism that Penguin Random House uses.
Tim Lewis: So existing publishers haven’t got these silly royalty structures us self-publishers have to put up with!
Dan Wood: Yeah I mean they do it’s just hidden from authors as the authors don’t really see the money at all. And that’s one of the big advantages of being indie is that you get to see the money very early on. We do daily sales estimates for most of our channels and then we do a monthly royalty payments. We never hang onto our money for very long because there’s no reason to anymore. It just reduces distrust and the author has been out a lot of bad players in the publishing industry that have gone out of business or done things in a shady manner and so with us we’ve always believed let’s get the money out of our hands as quick as possible get it back to the authors and that’s reduced a lot of that distrust.
Tim Lewis: It’s kind of a minimum amount before you pay out money?
Dan Wood: It is $10 for digital payments. So we support Paypal, we support direct deposit in your international direct deposit to get that $10 break point and then $25 for a physical check.
Tim Lewis: So I presume most people go for Paypal or direct transfer option.
Dan Wood: Yeah. And I encourage people to use direct transfer because in most cases it’s much quicker as Paypal delays the payment by anywhere from two to three business days. We have users that use services like pay you know. Right now we’ve kind of integrated that a little bit more but we haven’t and it’s not a large number of people to use it. But we try to make it easy. In some countries there are fees associated with international direct deposits and so those cases you probably need to PayPal that might be your only option in some countries. We try support as many different way ends up paying Authors as possible.
Tim Lewis:I presume the same sort of withholding tax rules applies as to other U.S. companies like Amazon for international people?
Dan Wood:Yes we have incorporated all of the the tax interview process into online so you know no longer have to fax or mail a copy of all the different documentation. Different countries have different tax treaties with the U.S. And so you want to make sure that you check and get all the documentation and that our process is very similar to what you see from Amazon. And it simplifies the process of setting up your tax information. In this case you going with us you upload your tax information once you’re done as opposed to going direct everywhere where you’re going to be putting tax information going back and forth about that same thing when you get your tax information. You get one nice little statement from Draft2Digital instead of like eight different forms and documents.
Tim Lewis: Yeah. I actually did it when it went electronic and it’s fairly simple now. I’m based in the UK.
Dan Wood:It’s been a learning experience for us, When we first started we didn’t support international and we had people reach out to us and we added support. And when everything went down with the VAT changes and the EU that was a big learning process and it’s been really interesting. I’m excited about the international portion of self publishing and publishing in general. Back in the day not a lot of books cross from the U.S. to Europe and vice versa. The U.S. to the Philippines. But now with digital you can get your book out everywhere and so people can buy it anywhere. I’ve always loved that little map that Kobo has that let you know where people buy your book. And I definitely want to do something like that on our site because it’s just so cool to think of having readers all over the world.
Tim Lewis: Yeah. Anyway where can people find out about you and Draft2Digital and go with further questions?
Dan Wood: We’ve got a blog draft2digital.com/blog that Kevin Tumlinson maintains. He’s done a very good job of adding a lot of content there over the last six months or so. So there’s a lot of difference I think and learn about both our system and you know he’s got some general advice like how to market different stuff like that. So I think authors will get a lot out of that. We’re on social media so you can find us as Draft2Digital on Facebook or @Draft2Digital on Twitter. We’re at a lot of conferences and so if you’re at a conference come by and say hi to us we generally have a table somewhere or we’ll be at the bar and hanging out with some authors.
We always like to meet authors in person. We have a really amazing customer support. And so you can e-mail us at email@example.com or we actually maintain a toll free number that you can call if got some questions that are easier to answer on the phone and that’s (866) 336-5099 in US hours 8 to 5 Central Time. So for some of the international users that might not be convenient depending on your time zone but it is something we offer especially if you are U.S. based and sometimes better to talk on a phone. It’s something we’re very proud to offer to people since it’s unusual in the publishing industry to have Phone support.
Tim Lewis: Thanks so much for being on the show today, Dan.
Dan Wood: Thanks for having me.
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